Most Effective steps of Bitcoin Trading For Profit and Beginners

Most Effective steps of Bitcoin Trading For Profit and Beginners

Bitcoin trading can be extremely profitable for professionals or beginners. The market is new, highly fragmented with huge spreads. Arbitrage and margin trading are widely available. Therefore, many people can make money trading bitcoins.

Bitcoin’s history of bubbles and volatility has perhaps done more to bring in new users and investors than any other aspect of the crpytocurrency.

Each bitcoin bubble creates hype that puts Bitcoin’s name in the news. The media attention causes more to become interested, and the price rises until the hype fades.

bitcoin trading

Each time Bitcoin’s price rises, new investors and speculators want their share of profits. Because Bitcoin is global and easy to send anywhere, trading bitcoin is simple.

Compared to other financial instruments, Bitcoin trading has very little barrier to entry. If you already own bitcoins, you can start trading almost instantly. In many cases, verification isn’t even required in order to trade.

If you are interested in trading Bitcoin then there are many online trading companies offering this product usually as a contract for difference or CFD.

Avatrade offers 20 to 1 leverage and good trading conditions on its Bitcoin CFD trading program.

Why Trade Bitcoin?

Before we show you how to trade Bitcoin, it’s important to understand why Bitcoin trading is both exciting and unique.

Bitcoin Is Global

Bitcoin isn’t fiat currency, meaning its price isn’t directly related to the economy or policies of any single country. Throughout its history, Bitcoin’s price has reacted to a wide range of events, from China’s devaluation of the Yuan to Greek capital controls.

General economic uncertainty and panic has driven some of Bitcoin’s past price increases. Some claim, for example, that Cyprus’s capital controls brought attention to Bitcoin and caused the price to rise during the 2013 bubble.

Bitcoin is Volatile

Bitcoin is known for its rapid and frequent price movements. Looking at this daily chart from the CoinDesk BPI, it’s easy to spot multiple days with swings of 5% or more:

Global Bitcoin trading data shows that a very large percent of the global price trading volume comes from China. It’s important to understand that the Chinese exchanges lead the market, while the exchanges above simply follow China’s lead.

The main reason China dominates Bitcoin trading is because financial regulations in China are less strict than in other countries. Therefor, Chinese exchanges can offer leverage, lending, and futures options that exchanges in other countries can’t. Additionally, Chinese exchanges charge no fees so bots are free to trade back and forth to create volume.

If you’d like to learn more about Bitcoin trading in China, this video from Bitmain’s Jihan Wu provides additional insight.

How to Trade Bitcoin

Kraken will be used as an example for this guide. The process and basic principles remain the same across all exchanges.

First, create an account on Kraken by clicking the black sign up box in the right corner:

bitcoin trading
You’ll have to confirm your account via email. Once your account is confirmed and you’ve logged in, you must verify your personal information. All Bitcoin exchanges require varying levels of verification as required by AML and KYC laws. Below you can find the first three verification levels:

bitcoin trading
Once your account is verified, head over to the “funding” tab. You should see something similar to the screenshot below. Select your funding method from the left side:

In the example orderbook below, you can see that the highest buy offer is for $382.5 per bitcoin, while the lowest sell order is at $384.07 per bitcoin.

bitcoin trading
Using the order form there’s also an option for “Market”.

bitcoin trading
A market order in this case would submit a buy order for XBT at the price of the lowest available sell order. Using the orderbook above, a market order for 0.5 XBT would purchase 0.5 XBT at $384.07 per XBT. If selling bitcoins, a market order would sell bitcoins for the highest available price based on the current buy orderbook—in this case $382.5.

Bitcoin trading is exciting because of Bitcoin’s price movements, global nature, and 24/7 trading. It’s important, however, to understand the many risks that come with trading Bitcoin.

Leaving Money on an Exchange

Perhaps one of the most famous events in Bitcoin’s history is the collapse of Mt. Gox. In Bitcoin’s early days, Gox was the largest Bitcoin exchange and the easiest way to buy bitcoins. Customers from all over the world were happy to wire money to Mt. Gox’s Japanese bank account just to get their hands on some bitcoins.

Remember that as with any type of trading, your capital is at risk. New traders should start trading with small amounts or trade on paper to practice. Beginners should also learn Bitcoin trading strategies and understand market signals.

Here are some of my older posts
https://steemit.com/flowers/@aryan12o/the-earth-laughs-in-flowers-the-beauty-is-all-around
https://steemit.com/swamivivekananda/@aryan12o/swami-vivekananda-the-great-monk-from-india-arise-awake-and-stop-not-till-the-goal-is-reached
https://steemit.com/whatsapptricks/@aryan12o/top-7-new-whatsapp-tricks-that-you-still-don-t-know

Follow me here - https://steemit.com/@aryan12o